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54 Economic crisis, health systems and health in Europe: country experience
Central government spending on health accounts for about 10% of total health
spending. Over 90% of central government health expenditure is financed
through the Ministry of Social Affairs. In 2009, the central government health
budget was cut by 26% (Table 2.4). This reduction was partially achieved
through cutting administrative costs within the Ministry of Social Affairs,
terminating the financing of capital costs from the state budget (capital costs
accounted for about 7% of central government expenditure in 2008) and
cutting the public health budget (see below). The European Social Fund was
used to compensate for the reduction in the public health budget.
Table 2.4 Central government health expenditure in Estonia, 2007–2011
Year
Central government
health expenditure
(€ millions)
Change (%)
Share of total health
expenditure
(%)
2007 80.6 9.7
2008 112.9 39.9 a 11.5
2009 83.2 –26.3 8.6
2010 86.0 3.3 9.5
2011 88.3 2.7 9.3
Note: a In 2008, a one-time capital cost transfer from the state budget was made to the EHIF, which
explains the high increase in that year.
Source: National Institute for Health Development, 2013a.
In terms of social health insurance contributions, the EHIF's revenues were
down by 11% in 2009 and by 5% in 2010, mainly because of increased
unemployment and lower salaries. In 2011 and 2012, revenue increased by 6%
and was projected to reach 2008 levels in 2013 (Fig. 2.3).
In 2009, the EHIF's expenditure exceeded revenue by around 2%. This gap
was eventually addressed by drawing on the EHIF's accumulated reserves.
The EHIF has mandatory legal and risk reserves to ensure solvency. The legal
reserve, 6% of EHIF's budget, decreases the risk from macroeconomic changes
and may be used only after government approval. The risk reserve, 2% of the
budget, minimizes risks arising from health insurance obligations and can
be used after a decision of the EHIF's supervisory board. In addition to its
reserves, by the end of 2011 the EHIF had retained about €150 million (almost
a quarter of the annual budget), mostly as a result of previous years' higher
actual revenues compared with those anticipated. In 2008, before the crisis hit,
the EHIF had over four times more reserves than the required level (Fig. 2.3).